[RPPTL LandTen] "Risk Mitigation Fee"

[James Glover]

My thoughts from an apartment community perspective. Right away I'm
thinking FHA and Fair Credit Reporting Act issues.

Practically speaking, the Tenants either meet qualifications or they don't.
I don't know why you make a downward exception on your qualifying criteria
just because a tenant offers you more money. You might as well throw your
criteria in the garbage and just raise your rents for everyone. I know
plenty of landlords that do just that, and get double market rents being
the "felon friendly" apartments. My experience, once you make that
departure upward or downward, you've changed the entire tenant mix for your
community. You can't just make one-time exceptions per FHA, if you have one
eviction tenant, then you rent to any eviction tenant.

Additionally, if you're giving different terms based on bad credit or
credit score, you need to be extra diligent in giving written credit
decision notices and justifying your decision criteria per the FCRA.

Can you charge the additional risk mitigation fee per this scheme?
Probably, but the income isn't worth the headaches.


*--*
*James "Jimmy" Glover*
General Counsel

*Circle Property Management,
Inc.office: 772-888-0865email: James at CircleRentals.com
<James at circlerentals.com>address: P.O. Box 1026, Jensen Beach, FL
34958Licensed Attorney in Florida and Alabama*

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>
> ---------- Forwarded message ---------
> From: Harry Heist <harry at evict.com>
> Date: Fri, Oct 25, 2019 at 10:59 AM
> Subject: [RPPTL LandTen] "Risk Mitigation Fee"
> To: RPPTL Landlord Tenant Committee <landten at lists.flabarrpptl.org>
>
>
> It seems like each day property managers are coming up with fees that I
> believe will eventually cause a problem and be class action material.
>
>
>
> They are spreading as these managers are on all of these Facebook groups,
> someone says they are doing it and then everyone thinks it is OK.
>
>
>
> The latest one I have been seeing is a “Risk Mitigation Fee”.
>
>
>
> This is a nonrefundable fee that the higher risk tenant (bad credit,
> bankruptcy, eviction etc) is being asked to pay as part of being approved.
>
>
>
> Often this “fee” is being kept by the property manager, split with the
> owner or given to the owner.  More often than not, kept by the property
> manager.
>
>
>
> Does anyone have any info on the legality of this?
>
>
>
> In the money lending world, creditors are free to charge a higher interest
> rate to a higher risk person but this now????
>
>
>
> Harry
>
>
>
>
>
>
>
>
> *LAW OFFICES OF HEIST, WEISSE & WOLK P.A.PH: 1 800 253 8428FAX: 1 800 367
> 9038"Serving the Property Management Professional"Website:  *
> *www.evict.com* <http://www.evict.com/>
> * Email: **harry at evict.com* <harry at evict.com>
>
> <https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870>
>
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> *Visit us on Facebook*
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